Customers of financial institutions (both individual customers and businesses) typically maintain multiple financial accounts at one or more financial institutions. Financial institutions include, for example, banks, savings and loans, credit unions, mortgage companies, lending companies, and stock brokers. These financial accounts include asset accounts (such as savings accounts, checking accounts, certificates of deposit (CDs), mutual funds, bonds, and equities) and debt accounts (such as credit card accounts, mortgage accounts, home equity loans, overdraft protection, and other types of loans).
In many situations, a user's asset accounts may not be earning the best available interest rate or the user's debt accounts my not be at the most competitive interest rate. It would be to the user's benefit to adjust the funds between different accounts to maximize the interest earned in the asset accounts and/or minimize the interest paid in the debt accounts. For example, a user may have a checking account that pays no interest, but has a high balance. A portion of the funds in the checking account could be transferred to a savings account or other asset account that pays interest on the funds in the account. Similarly, a user with a high credit card balance could save money if a portion of the credit card balance was transferred to a home equity line of credit at a lower interest rate.
Certain users do not regularly monitor the balances of their asset accounts or debt accounts. These users typically rely on the statements issued (e.g., monthly or quarterly) by the financial institution responsible for the account. Thus, these users do not typically know the balances of their various accounts. Even on the day they receive their statement from the financial institution, the status of the accounts may have changed due to other transactions that occurred after the statement was generated.
Other users track asset account and debt account balances using paper forms or registers which are reconciled against the account statements issued by the financial institutions. If the user accurately enters every financial transaction and successfully reconciles every statement from the financial institution, then the paper forms or registers will reflect the current account balances of the user's accounts. However, to determine whether the user's assets or debts could be adjusted for the benefit of the user, the user would need to manually review the various account balances and interest rates, and determine the amount of funds to be transferred between the different accounts. This process can be tedious, especially to users that do not have the patience to review multiple accounts, compare balances and interest rates, and calculate the estimated savings associated with certain transactions. The user must also determine whether the time and effort required to implement the transactions is worthwhile in view of the savings that result from the transactions. For example, if the user must go to the financial institution to transfer funds which would result in an interest savings of a few dollars, the user must decide whether the transaction is worthwhile. This cost-benefit analysis is typically performed for each transaction each time the user reviews their accounts.
Certain financial software packages allow users to enter financial transactions and generate reports indicating current account balances. Example software packages include Quicken available from Intuit Inc. of Mountain View, Calif., and Microsoft Money available from Microsoft Corporation of Redmond, Wash. If all financial transactions are entered into the financial software package and each statement from a financial institution is reconciled, then the software package accurately displays the user's account balances. However, to determine whether funds should be transferred between accounts, the user is required to review multiple accounts, compare balances and interest rates, and calculate the estimated savings associated with certain transactions. Additionally, the user must perform a cost-benefit analysis for each transaction, as discussed above.
If the user does identify the funds to be transferred between different accounts, the user is then required to execute the necessary transactions. To execute these transactions, the user may need to visit one or more financial institutions and request the appropriate fund transfers. However, if one or more of the financial institutions is located in a distant town, the fund transfers may need to be processed by check or bank wire. Alternately, the user may execute some of the transactions through an online banking service, if the financial institution supports online banking. However, typical online banking services do not permit the transfer of funds between two different financial institutions. Thus, if a user wants to transfer funds, for example, from a checking account at a bank to a money market account at a stock broker, the user cannot generally execute the transfer using online banking.
Instead, the user needs to withdraw funds manually using, for example, a check and manually deposit the funds in the second account (either in person or by mail). Since the second account may place a hold on the deposit, the actual fund transfer may not occur for a week (or longer) depending on the amount of the check, the policies of the financial institutions, and any delays involved with mailing the check. A bank wire provides a faster method of transferring funds between financial institutions, but is not generally cost-effective for small transfers (e.g., transfers of less than a few thousand dollars), due to the costs associated with the bank wire. For small transfers, the costs associated with the bank wire may exceed the interest savings generated by the transfer.
Thus, the systems available today do not provide a mechanism for automatically analyzing multiple user accounts to identify fund transfers that would be favorable to the user.
The systems and methods described herein addresses these and other problems by automatically analyzing multiple user accounts, both asset accounts and debt accounts, to determine whether an adjustment of funds between accounts would benefit the account holder.